Chinese manufacturer LeEco was bullish about its chances of breaking into the US smartphone and gadgets market, mainly because it thought it had a different proposition to offer consumers here. At the heart of that proposition was the LeEco EcoPass, a content and services subscription model that they bundled with those who purchased their phones and TVs initially. The EcoPass is now dead, according to an announcement from LeEco, and the embattled Chinese company is struggling to find a foothold in the US market.
The LeEco EcoPass was supposed to be the added value that consumers would find with every purchase of a LeEco smartphone or TV. It combined premium video streaming content, extended warranties, cloud storage, priority customer service and other services. But more than that, it was supposed to be the entry point for recurring profit, as LeEco planned to sell a lot more of their products through the service.
But LeEco has found the going very tough in the US market, and it has had to adjust its strategy. This is their official statement: “We have discontinued the EcoPass Beta program as of April 1. We will be replacing EcoPass with 3-months of DirecTV NOW with every purchase of a LeEco ecophone or ecotv. We believe this provides greater value to our customers since it has over 60 channels that include the latest movies and shows.”
LeEco had set an internal target of around USD$100 million in hardware sales for the US market, and Bloomberg says it has only sold around US$15 million worth of devices. The sales model that LeEco uses – with online flash sales and offers – worked sufficiently well in China. But in the US, a lot of people still walked into a brick-and-mortar store to get a phone. Bloomberg reports that as a result, LeEco is planning significant staff cuts in the US.